Google's new self-driving car during a demonstration at the Google campus in Mountain View, Calif. The federal government's highway safety agency agrees with Google: Computers that will control the cars of the future can be considered their driver. The redefinition of "driver" is an important break for Google. (AP Photo/Tony Avelar, File)

Companies like Visteon (NYSE: VC), which makes infotainment systems and connected car solutions, is already working with leading automakers like Ford, Mazda, Renault/Nissan, GM, Jaguar Land Rover, Honda, BMW, Daimler, PSA and Volkswagen. The company is working on making it easier for automakers to update apps in cars but also add a layer of cyber security to the infotainment system. More apps in cars mean more cybersecurity threats. The company's infotainment platform, Phoenix, has built-in cybersecurity so when the apps are running on the car, they can't access any critical resources on the system. The platform also allows secure and faster over-the-air software updates.

Detroit has decades of experience building hardware, the cars. Newcomers like Google and Tesla are reverse engineering the new connected car creating the tech first, then building the car. So the race is on. Now, instead of chassis and engines, automakers are looking at creating cars with software as the core.

Since 2011, BMW, Honda, Hyundai, Mercedes-Benz, Nissan-Renault and Toyota have opened R&D centers in Silicon Valley. According to Computerworld, Nissan is developing autonomous vehicles and Honda is working on human-machine interface technology and connected vehicles in their Silicon Valley locations.

Automakers are not alone in seeing this shift from hardware to software in cars. Start ups like AImotive see a market opportunity as well.

The Budapest-based start up recently raised $10.5 million in funding from a diverse group of investors including Nvidia and Draper Associates and Robert Bosch Ventures in Germany who are all banking on the company's new artificial intelligence software that's specfically designed for the automotive industry. The company recently opened offices in Silicon Valley.